Business

Stocks fall to 4-week low ahead of BSP rate meeting

MANILA, Philippines — The stock market went on a tailspin again yesterday, with the index falling back to the 6,800 level not seen since Oct. 11, as investors remained cautious ahead of the policy meeting of the Bangko Sentral ng Pilipinas (BSP) on Thursday.

The benchmark Philippine Stock Exchange index (PSEi) slipped 1.18 percent or 82.37 points to finish at 6,843.83, while the broader All Shares gauge shed 0.98 percent to print a low of 4,211.13.

The rest of the sectoral indices took the cue and stayed in negative territory, with holding firms, property and financials sectors leading the decline.

Several corporate third-quarter earnings, although better than expected, were likewise not enough to convince investors to hunt for some bargains, preferring instead to wait for the monetary authorities’ decision on Thursday. Traders reactions are mixed on what will happen. Some expect the BSP to hike policy rates by 25 basis points, but others expect monetary officials to pause and take a breather with rates now up by 150 basis points.

Among those that dragged the index were heavyweights JG Summit, whose share price lost 6.9 percent; Metro Pacific Investments Corp.; which lost 4.8 percent; Aboitiz Power, which was down 2.5 percent; SM Prime, which declined 2.3 percent and SM, which lost 1.3 percent.

On the other hand, Ayala-led Globe gained 4.3 percent, LT Group, too was up by 1.2 percent and Megaworld rose 1.1 percent. These three big companies had the highest gains yesterday after booking strong nine-month results.

Piper Chaucer Tan of Philstocks Financials said the selloff at Wall Street also affected the local market and other markets in the region as well.

“It was affected by the US market selloff. This is the largest sell off for the Nasdaq since 2011 due to worries on global growth outlook and protectionist policies of the US,” Tan said.

This, he added, dampened equities markets across the world.

On the local front, he said the better-than-expected earnings results did not convince investors to go back to the market amid lingering concerns on inflation and the depreciation of the peso.

Inflation stayed at 6.7 percent in October, the same level as in September from 6.4 percent in August but what investors would like to see is for it to normalize and go down again.